- Coinbase has offered users fee-free USDT-USDC conversions
- Coinbase co-founded USDC in 2018 with Circle
- Binance essentially delisted USDC in September in favor of BUSD and USDT
Coinbase has pushed users to switch from Tether’s USDT stablecoin to Circle’s USDC, tarnishing USDT’s reputation in the process. Calling USDC a “trusted and reputable digital dollar”, Coinbase has taken steps to assist users in their quest for safe crypto dollardom by scrapping conversion fees for those who wish to follow its advice. The move by Coinbase, which co-founded USDC with Circle in 2018, comes months after Binance began auto-converting USDC to USDT and stripping all USDC pairs on its platform.
Coinbase’s Transparency Claim Falls Flat
Coinbase announced its move in a blog post yesterday, and while it didn’t obviously criticize Tether directly, it nevertheless addressed issues that many have with the world’s biggest stablecoin:
USDC is unique in that it’s 100% backed by cash and short-dated U.S. treasuries held in U.S. regulated financial institutions. It’s always redeemable 1:1 for U.S. dollars. Customers are calling for transparency, and USDC delivers via monthly attestations by Grant Thornton LLP, one of America’s largest audit, tax, and advisory firms.
Of course, one of the biggest criticisms of Tether is that it has never issued a full, independent audit, relying instead on regular attestations. However, this is exactly what Coinbase says that USDC undergoes, which hardly makes for increased transparency over its rival.
More Shots Fired in Stablecoin Wars
Circle and Coinbase are miffed because in September USDC was one of the stablecoins that Binance ditched in favor of USDT and its own BUSD stablecoin. While this move isn’t of course any kind of direct retaliation, it is nevertheless an interesting decision to take just weeks after Binance’s actions.
Tether CEO Paolo Ardoino hasn’t spoken publicly about the move from Coinbase, but he did retweet a couple of tweets suggesting that Coinbase had made an error in choosing its own USDC token over USDT. This is very likely not the last shot to be fired in the multi-billion dollar stablecoin wars.